Ryanair – Europe’s largest budget airline – has reported a significant profit decline and scaled back its growth expectations amid challenges from Boeing aircraft delivery delays, lowered fares, and consumer spending pressures.
For the six-month period ending in September, Ryanair’s net profit dropped by 18% to £1.5bn, down from the same period last year.
The airline attributed this decrease to a combination of factors, including a fall in peak-season fares and increased operational costs.
To attract more passengers, Ryanair had reduced ticket prices by 10% on average compared with the previous year. The move helped it carry a record 115 million passengers, a 9% increase, over the April-to-September period.
However, chief executive Michael O’Leary explained the lower fares had also contributed to the drop in profits.
Fares fell 15% in Ryanair’s fiscal first quarter and 7% in the second, leading to a summer average fare of £43.
The airline’s discounted fares created a mixed outlook, as lower ticket prices meant slimmer profit margins, but they enabled Ryanair to capture a greater market share and draw passengers from rival carriers.
Ryanair sparked industry concerns earlier in the summer when it warned of falling ticket prices – a departure from the post-pandemic surge in air travel demand.
The airline’s operational challenges were exacerbated by delays in the delivery of Boeing’s 737 Max-10 aircraft.
The airline had initially planned for substantial growth by expanding its fleet with these new planes, but Boeing’s production delays, exacerbated by worker strikes and supply chain issues, meant that only 172 out of 300 ordered planes have been delivered.
Mr O’Leary expressed frustration over these setbacks, explaining the delayed deliveries left Ryanair “over-scheduled, over-crewed, and over-costed” during the busy summer months.
